Bank of America recently said in a report that Bitcoin could become 'a major means of payment for e-commerce,' and as an avid observer of digital currencies, I believe this to be a major step toward globalized finance. The recent controversy surrounding Bitcoin, however, lies within the fact that 90 percent of Bitcoin buyers are market speculators, according to Nicholas Colas of the ConvergEx group.

While Bitcoin is an ideal proof of concept for what digital currencies might look like in the future, I think entrepreneurs should be thinking big picture. The explosive popularity -- and price -- of Bitcoin is temporary, but understanding the brass tacks value behind Bitcoin and its upstart competitors are where you'll find the next-level thinking that will shape the future.


The Good: Digital currency needs a champion. The most exciting element of Bitcoin -- and most dangerous for speculators -- is that technology is iterative and Bitcoin is only the first wave. While there is a hard cap of 21 million Bitcoins available to be mined, the number of routes digital currency can take are infinite. Alternative cryptocurrencies such as Litecoin, Peercoin and Namecoin have been gaining traction by offering users separate systems of economic growth and even simulating inflation. A mainstream competitor is already in the works, and the Let's Talk Bitcoin blog recently uncovered a patent filed by JPMorgan Chase to develop a solution to the primary issue of international online money transfers that independently produced digital currencies could potentially solve.